Personal loans can be used for any purpose, but student loan can be used only for college tuition fee and other college expenditures.
Due to rise in college tuition and fees every year, it has become quite expensive for students to cover it up with their part time earnings and pocket money. So many students look up to personal loan to add it in their financial resources for college funds. They use personal savings, scholarships, grants and Federal student loans to fulfill their college needs. But still unable to meet many expenses, such as computers, books and other college related necessities.
Living in college campus means rent, groceries, utilities and many other expenses. And in case of commuting means transportation charges too.
College students own minimum source of finances, should avoid getting loan too early. They have no source of proper monthly income and unable to handle pay back of monthly installments of a loan. It is advised to use your personal finances in the beginning. Borrowing loan should be your last option of financial aid.
Personal loans are usually unsecured loans with high interest rates and charges. These are high risk loans with low amount of loan, in the absence of any security.
To qualify for personal loan needs good credit score and steady source of income. This is not possible for every student to show proof of an adequate amount every month.
Personal loan is not a good choice for students, in the absence of any security, it is expensive for them. Students have low credit score and lenders view them as risk. They will offer high interest rates to students with no security. And no or less credit score of students add to it.
It’s a tragedy that many students will graduate, with debt to pay.
Another way to get personal loan, requires a co-signer. It means you need someone to give your guaranty and sign the application form of loan. But everyone is not lucky to find an ideal co-signer.
There is a company which offer personal loan for students, on affordable and convenient terms and rates. They do not require any collateral, co-signer, credit history and social security numbers. The only need you to be a U.S. citizen, enrolled in a U.S. college or university with average grades. They will require legal documents of your citizenship.
Having student loan is enough for a student to deal with. He should think twice before applying for personal loan unless he is getting better interest rates and afford to pay back easily. There are alternatives options of personal loan for students:
- Some schools offer grants to students with financial needs. Check the financial aid office to see what is available for students in financial emergency crisis.
- Federal loans may be your best choice, offering many benefits and tax advantages for students. They give you loan on flexible terms of repayment and offer you grace period means; you can start paying back loan after six to nine months after graduation.
Their interest rate is typically lower than market and your parents can also get additional loan, Parent Plus loan, to help you.
- There are student credit cards, easy to get offering decent interest rates and rewards. Students can get benefits from them by paying their bills every month, building their credit score higher.
- Many private student loans are available, typically with high interest rates and less benefits. But a few private lenders offer low or no interest fee, help save money.
Whatever you choose, choose sensibly, making sure you can afford to pay back easily. Make smart plans for your future to get rewards later.